Valuation Offi ce Agency Understanding your council tax banding The current rules for council tax in England a VVO7858O7858 uunderstandingnderstanding cct.inddt.indd a 115/4/085/4/08 111:09:461:09:46 Introducing the Valuation Offi ce Agency The Valuation Offi ce Agency (VOA) is an Executive Agency of HM Revenue & Customs (HMRC). Our main functions are to: • Compile and maintain the business rating and council tax valuation lists for England and Wales. In Scotland council tax and business rates are dealt with by the Scottish Assessors • Value property in England, Wales and Scotland for the purpose of taxes administered by HM Revenue & Customs • Provide statutory and non-statutory property valuation services in England, Wales and Scotland • Give policy advice to Ministers on property valuation matters Further information is available at all our offi ces and on our website, explaining these areas of work and standards of service we provide. www.voa.gov.uk Contact details for your local offi ce can be found at the back of this booklet. b VVO7858O7858 uunderstandingnderstanding ct.inddct.indd b 115/4/085/4/08 111:09:491:09:49 The purpose of this booklet This booklet explains the council tax bands that are currently in effect in England, how council tax bands are allocated, and what this means for your council tax bill. This booklet sets out the current rules for all properties in England. It applies equally to old and new properties regardless of date built. This booklet should not be regarded as a complete guide to the law. If you require this booklet in an alternative format or language, please contact your local Valuation Offi ce. Contents What is council tax? 2 Council tax bands 3 Why 1 April 1991? 3 Defi ning the taxable property 4 Allocating the band 4 - 5 Changes in the property market 5 Changes in banding 6 Home improvements and council tax banding 7 Moving home? 7 Changes to your property or to the locality 8 Self-contained units 8 - 9 Multi-occupied property 10 Using your home for business 10 Provisions for people with disabilities 10 What to do if you disagree with your council tax banding 11 The council tax bill 12 Paying the bill 12 Further information 13 1 VVO7858O7858 uunderstandingnderstanding ct.inddct.indd 1 115/4/085/4/08 111:09:501:09:50 Council tax What is council tax? Council tax in England is a local tax based on what a home would have sold for at a fi xed point in time:1 April 1991. The income from council tax is collected by local councils to help pay for local services. The VOA is the government organisation responsible for allocating a council tax banding to all homes in England and Wales. Wherever you live, you can check your current council tax band and the council tax band allocated to all other homes in the council tax valuation lists, available on the VOA website at www.voa.gov.uk. The VOA has offi ces throughout the country. We are not part of your local council (who are responsible for the production of your bill and collection of payments) although we do work closely with them on the council tax system. 2 VVO7858O7858 uunderstandingnderstanding cct.inddt.indd 2 115/4/085/4/08 111:09:501:09:50 Council tax banding Council tax bands The table below shows the range, based on 1 April 1991 values, for each band in England. These bands, which came into effect on 1 April 1993, were set by Parliament in the Local Government Finance Act 1992. Each year your local council sets the level of council tax and can tell you the amount payable for each band. Valuation Band Open Market Value as at 1 April 1991 Band A Not more than £40,000 Band B £40,001 to £52,000 Band C £52,001 to £68,000 Band D £68,001 to £88,000 Band E £88,001 to £120,000 Band F £120,001 to £160,000 Band G £160,001 to £320,000 Band H More than £320,000 Why 1 April 1991? Council tax is based on what a property would have sold for on a set date: 1 April 1991. This common date ensures that every property is treated in the same way, even those that weren’t built at the time, giving a fair and consistent approach for everyone. Even new homes are valued on the basis of what they would have been worth on 1 April 1991. Any increase or decrease in a property’s value caused by general fl uctuations in the housing market will not affect a council tax band, unless and until there is a council tax revaluation. More information on how we value property for council tax can be found in the council tax section of the VOA website www.voa.gov.uk. 3 VVO7858O7858 uunderstandingnderstanding ct.inddct.indd 3 115/4/085/4/08 111:09:501:09:50 The property Defi ning the Broadly speaking each separate unit of living accommodation, taxable property occupied by the same person(s) and within the same area of land, comprises a ‘dwelling’, together with any garden, yard, garage or other outbuildings attached to it. This is an important point in understanding what the VOA is looking at when allocating your property to one of the bands. It is also a good starting point if you want to compare your property with others. Each property is allocated to one of the eight bands, A to H, (‘A’ being the lowest) according to its notional value on 1 April 1991, as detailed in the previous section. The bands are shown against all properties in local valuation lists. The lists show which band a property has been allocated, which refl ects a value range, not an actual value. The lists can be viewed online at www.voa.gov.uk. Allocating the band The VOA takes account of the size, age and character of the property as well as its location when allocating a council tax band. It uses property sales prices achieved around 1991 to arrive at the correct band for the property. For council tax, the basis of measurement for all houses and NOTE: bungalows is the building’s gross fl oor area, including wall This is a simplifi ed thicknesses. This will include bay windows, chimney breasts explanation. For etc., but will generally exclude areas with headroom under further information 1.5metres (e.g. under sloping ceilings in attic rooms). about how your property is measured The basis of measurement for most fl ats and maisonettes is see www.voa.gov.uk net fl oor area with measurements taken between the wall surfaces of each room (not skirting boards). Bathrooms, WCs 4 VVO7858O7858 uunderstandingnderstanding cct.inddt.indd 4 115/4/085/4/08 111:09:501:09:50 The property 1 ‘open market’ – this and associated lobbies, as well as connecting corridor areas assumes the property within a fl at would not usually be measured. As with houses, is offered freely with areas with headroom of less than 1.5metres will be excluded. adequate publicity given to the sale. Please note The basis of valuation used to allocate a council tax band that sales under a discount is the amount, subject to certain assumptions, the property scheme (such as ‘Right to 1 Buy’) do not fall within the would have sold for on the ‘open market’ by a ‘willing 2 defi nition of ‘open market’. vendor’ on 1 April 1991. 2 ‘willing vendor’ – The following assumptions, which are set out in regulations someone who willingly made by Parliament, are made to ensure that a fair and sells a property and is not consistent approach is always adopted: in any way forced to do so. • The assumed sale was with vacant possession 3 ‘state of reasonable • Houses were sold freehold repair’ – the state of repair it would be reasonable • Flats were sold on a 99 year lease to expect for a property, • Properties were in a ‘state of reasonable repair’3 taking its age, character and location into • The property had no potential for any building work or consideration. other development requiring planning permission Changes in the Assessments are based on the price a property would have property market achieved if it had been sold on the open market on 1 April 1991. Any increase or decrease in a property’s value caused by general fl uctuations in the housing market since 1991 will not affect a council tax band, unless and until there is a council tax revaluation. 5 VVO7858O7858 uunderstandingnderstanding cct.inddt.indd 5 115/4/085/4/08 111:09:531:09:53 The property Changes in Individual properties might need to have their banding banding re-considered. This may apply to you if: • Your home decreases in value because: - part of it is demolished - substantial changes take place in the local area (for example a new road is built nearby) - alterations have been carried out to make it suitable for use by a person with a physical disability (see page 8 ‘Changes to your property or to the locality’) • You start or stop using part of your home to operate a business, or the balance between business and domestic use changes • Your home has a higher value because a previous owner has carried out major improvements, such as building an extension; this would usually affect the banding for the new occupier and not the person who had the work done (see page 7 ‘Home improvements and council tax banding’) • You create a self-contained unit, such as an annexe to house an elderly relative (see page 8 ‘self contained units’) • A house has been split into individual fl ats, or fl ats have been merged into one home • Information is brought to light that makes it clear that the original banding was wrong 6 VVO7858O7858 uunderstandingnderstanding cct.inddt.indd 6 115/4/085/4/08 111:09:561:09:56 The property Home improvements Your council – through the planning or building control and council tax process – informs us when any alterations have been carried banding out to a property, such as an extension.